Question

If her adjusted gross income (all from wages) for the year is $18,500, calculate clarita's child and dependent care credit for 2016.

Answer 1

If her adjusted gross income (all from wages) for the year is $18,500, calculate clarita's child and dependent care credit for 2016.

Answer 2

Clarita's adjusted gross income (AGI) is $18,500.

According to current tax laws,
If AGI ≤ $15,000, CDCTC (child dependent care tax credit) = $2100 maximum.
If AGI = $43,000, CDCTC = $1,200 maximum.

On a linear scale, Clarita's CDCTC is given by
CDCTC = 1200 + [(18500 - 43000)/(15000 - 43000)] * (2100 - 1200)
= $1,987.50

Answer: $1987.50